Court File and Parties

COURT FILE NO.: F1802/13-01

DATE: September 23, 2014

SUPERIOR COURT OF JUSTICE – ONTARIO

FAMILY COURT

RE: Stephanie Gail Smith, applicant

AND:

Gerald Paul Nicholson, respondent

BEFORE: MITROW J.

COUNSEL: Sharon Hassan for the applicant

Denis E. Burns for the respondent

HEARD: September 5, 2014

ENDORSEMENT

[1] The applicant wife brings a motion for various interim relief, initially returnable May 14, 2014.

[2] At the outset of the hearing of the motion, the parties filed minutes of settlement consenting to a final order in relation to child support; that final order was made on September 5, 2014 as asked by the parties. This order was made pursuant to the Family Law Act, R.S.O. 1990, c. F.3.

[3] The remaining issues that were argued on the applicant’s motion were: (a) interim spousal support; (b) an order directing the respondent to return to full-time employment during the course of this lawsuit and directing the respondent not to retire during the course of this lawsuit.

[4] For reasons that follow, the applicant’s motion is dismissed.

Background

[5] The parties cohabited during marriage for 28 years. They were married in 1978 and separated in 2006.

[6] There are four children of the marriage, born during the period 1986 to 1992. Currently none of the children is a dependant for the purposes of child support, with the exception of the youngest child, Chloe, age 22, who is in university.

[7] The respondent is employed by the federal government. He is age 58, and has taken steps to retire in 2016, when he will be age 60. He is university educated.

[8] The applicant is age 60. She too is university educated having obtained degrees to qualify her to work as a teacher. However, the evidence is that during the marriage the applicant did not pursue a teaching career, but rather worked in the home caring for the children. The applicant did have some part-time employment during the marriage. Currently, the applicant has part-time employment, including working as a yoga instructor and this includes conducting yoga classes in her home.

[9] The parties resolved all issues on separation pursuant to a separation agreement signed by the parties in 2007 (by the applicant in April 2007 and by the respondent in May 2007).

[10] The separation agreement included the following:

(a) the children resided primarily with the applicant;

(b) the applicant’s 2006 income was stated to be “about $3,000” and the respondent’s 2006 income was stated to be “about $88,000”;

(c) child support was agreed at the table amount of $1,900 per month, and spousal support was agreed at $1,900 per month; the respondent was also to pay a substantial share of the children’s section 7 expenses;

(d) spousal support may be changed if there is a material change in circumstances, and this includes a change in the child support arrangements (para 4.30(b));

(e) child support was to be reviewed annually; (the parties do not dispute that annual adjustments were made to child support commensurate with increases in the respondent’s income);

(f) the separation agreement contained a somewhat unusual provision providing in effect, an acknowledgement by the respondent that the applicant will be entitled to spousal support “for life” given the circumstances specifically referred to in the agreement (see para. 4.30(d));

(g) the separation agreement required the respondent to maintain medical insurance coverage for the applicant, even when he retires unless he “cannot afford” to purchase such coverage (para 5.6); also the respondent’s obligation to maintain life insurance and keep the applicant named as a beneficiary continued after he retired (see para. 6.1); and

(h) although it is not necessary to detail the property provisions, it is noted that pursuant to the separation agreement, the applicant received for her interest in the respondent’s pension, the sum of a little over $353,000, in early 2011.

[11] Mr. Burns was not counsel for the respondent in negotiating the separation agreement; the applicant was represented by her present law firm during the separation agreement negotiations.

[12] The parties are not divorced. The respondent submits this is because he must provide benefits and life insurance coverage to the applicant, and he need to access that coverage from his employer.

[13] The respondent has implemented a plan of retirement to retire at age 60 (in 2016). He took pre-retirement transition leave for two years starting January 2014 meaning that he works 60% of a regular work week. His salary is reduced accordingly.

[14] In 2013, the respondent received a one-time non-recurring severance pay of just over $54,000, most of which was transferred into his RRSP.

[15] The applicant complains, quite vociferously, that the respondent failed to disclose this income immediately, as he was required to do, pursuant to the separation agreement. The respondent does not dispute his obligation, and his failure, to disclose this information immediately.

[16] The respondent submits that during his two years of pre-retirement transition leave, that he will draw down on the lump sum severance paid into his RRSP in 2013 in order to maintain his existing child support and spousal support obligations. The respondent submits that for the purpose of the motion, the court should treat him as earning a full-time income (an amount just over $105,000).

[17] The final order relating to child support made on September 5, 2014, pursuant to the minutes of settlement, obligated the respondent to pay child support for 2013, based on his total 2013 income of $159,270 that includes the severance income. Effective January 1, 2014, the respondent’s obligation to pay child support for the one remaining dependent child, Chloe, is set at $890 per month, pursuant to s.3(2)(a) of the Child Support Guidelines, O. Reg. 391/97 [as amended] and is based on an income of $105,220. Pursuant to the order, at the latest, the respondent’s obligation to pay child support for Chloe will cease when she attains age 24, which will coincide with the respondent’s planned retirement. Accordingly, the effect of the final child support order is to impute full-time income to the respondent, for child support purposes.

[18] The final order fixes child support arrears for 2013 at $6,269.20 and requires payment by the respondent of that full amount on execution of the minutes of settlement.

Discussion

[19] This case is on the assignment court list for October 2014. It is expected to be tried in early 2015.

[20] The proceeding commenced by the applicant is a motion to change the support provisions of their separation agreement, which was filed by the applicant with the court, pursuant to s. 35 of the Family Law Act.

[21] The applicant seeks an order for interim spousal support to commence January 1, 2014, based on the respondent’s 2013 income of $159,269 and based on the applicant’s income of $5,927.

[22] The starting point in dealing with the motion is to understand that it constitutes a motion to vary a final order of spousal support, on an interim basis, pursuant to the Family Law Act. The filing of the separation agreement means that the support provisions contained in it may be varied under s. 37 as if the separation agreement was an order of the court (s. 35(2)).

[23] I do not accept the applicant’s submission attempting to characterize the motion as an enforcement of the separation agreement. There is nothing in the separation agreement that supports branding the present motion as an enforcement proceeding.

[24] The Family Law Act does not contain a provision specifically authorizing an interim variation of a final order of spousal support. The jurisprudence on this point consists of cases where an interim variation was refused on the basis of no specific statutory authority; but other cases have permitted an interim variation if certain conditions were satisfied, including a finding that a continuation of the final order would be “incongruous and absurd”.

[25] In Clark v. Vanderhoeven, 2011 ONSC 2286 at paras. 50-67, I discussed the relevant jurisprudence on this issue as follows at para. 67:

In summary, when deciding whether there should be an interim variation of a final spousal support order pursuant to the Family Law Act, the following are some of the factors the Court should consider:

1. Whether the moving party has demonstrated a prima facie case on the merits of the variation application;

2. In addition to 1) above, it may also be appropriate to consider whether the moving party has come to court with “clean hands” (see in particular para. 35 in Hayes where Spies J. reviews the decision of Quinlan J. in Garneau v. Ontario (Director, Family Responsibility Office, 2010 ONSC 2804, [2010] O.J. No. 2109 (Ont. S.C.J.) which dealt with a stay of enforcement and where Quinlan J. indicated that this should only be granted where a support payor has demonstrated a prima facie case on the merits of a variation application and has come to court with “clean hands”);

3. There must be a clear case of hardship or the continuation of the order must be “incongruous and absurd”;

4. In assessing the meaning of “incongruous and absurd”, these terms would suggest the order is “inappropriate, unreasonable or ridiculous”; and

5. The court should also consider whether the need for a variation is urgent (the test for urgency having been set out in Crawford v. Dixon and approved in Fredette and in Hayes).

[26] In the case at bar, assuming for the purpose of these reasons that the applicant has demonstrated a prima facie case for variation of spousal support, the applicant has not satisfied the condition that this is a case of urgency or hardship or that continuation of the existing payments for spousal support pursuant to the separation agreement, until trial, is “incongruous and absurd”.

[27] The applicant relies on L.M.P. v. L.S., 2011 SCC 64 at paras. 36-39. The applicant submits that reading the separation agreement as a whole, that the parties, by contract, have expanded the circumstances where an interim variation of spousal support should be granted. The applicant further submits that the separation agreement contemplated a material change in circumstances as including a change in child support. Currently, there is only one dependent child (as opposed to four), and the applicant argues that this fact coupled with the fact that the respondent’s income has increased since the separation agreement was signed, supports an order for an immediate increase in spousal support.

[28] However, the reduction in child support and an increase in the respondent’s post-separation income are only some of the factors to consider. The respondent argues that income should be imputed to the applicant for having failed to secure more remunerative employment given her education. There is clearly a factual dispute in the motion material as to the expectation of each party as to when the applicant was to re-enter the workforce. The respondent also raises an issue as to the extent, if any, that post-separation increases in the respondent’s income should be considered for spousal support purposes.

[29] The issue as to variation of spousal support is best left to the trial judge, especially considering the proximity of the expected trial date.

[30] Much argument was directed on what income to use for the respondent for interim spousal support for 2014. Even if it was appropriate to order interim spousal support for 2014, I agree with the respondent’s submission that the parties have already agreed to include the respondent’s severance income as part of his 2013 income for child support purposes. It would be inconsistent to consider whether the severance income should form part of the respondent’s income for 2014 for spousal support purposes. Therefore, any order for interim spousal support for 2014 would not include the severance income earned in 2013. Accordingly it becomes an issue for trial as to what extent, if any, the respondent’s severance income received in 2013 should be taken into account in determining his spousal support obligation for 2013.

[31] I find that the applicant’s request to order the respondent, pending trial, not to retire, and to return to full-time employment, to be without merit. The applicant provides no jurisprudence where a similar interim order was made. The order sought resembles an interim injunction.

[32] The issue of whether the respondent should be retiring at age 60 is not an issue for the motion. The respondent’s decision to retire has been made. The retirement is to take effect in 2016, well after the expected trial date. The respondent is now on pre-retirement transition leave. If the applicant is correct that the respondent should not have elected to retire at age 60, given his obligation to pay spousal support as set out in the separation agreement, then the applicant has a remedy at trial to request that income be imputed to the respondent.

[33] I agree with the respondent that there is no proper basis on which a court should be making an order for interim spousal support.

[34] Interestingly, the material filed by each party, shows very similar Spousal Support Advisory Guidelines ranges for spousal support using the respondent’s income of $105,183: the applicant’s Spousal Support Advisory Guidelines amounts ranged from a low of $2,237 to a high of $2,785; the respondent’s ranges were from a low of $2,170 to a high of $2,758.

[35] Assuming that it is appropriate to consider the Spousal Support Advisory Guidelines (given that this is a motion to vary), the foregoing shows that the current spousal support of $1,900 per month is not far outside the Spousal Support Advisory Guidelines ranges, being just outside the low end of the range; this is despite the increases in the respondent’s regular income; despite the fact that 3 children are no longer dependants; and without considering the respondent’s arguments about imputation of income to the applicant and to what extent post-separation income increases should be considered.

[36] There is no necessity to order, on an interim basis, the continuation of the current spousal support payments of $1,900 per month. There is already a legal obligation to pay that amount.

[37] The order below deals with ensuring this case is heard by early 2015.

Order

[38] The applicant’s motion is dismissed.

[39] The trial of the proceeding shall be expedited, and it shall be assigned a trial date in priority to other cases to ensure it is heard in early 2015.

[40] In relation to costs, the parties are encouraged to resolve costs of the motion, and to consider whether costs should be left to the trial judge.

[41] Failing agreement, the parties shall forward written costs submissions to the trial co-ordinator, (not to exceed 3 pages plus any offers, time dockets or authorities); the respondent shall file his submissions within 14 days; the applicant shall file her responding submissions within 14 days thereafter; and the respondent’s reply, if any, shall be filed within 7 days thereafter.

“Justice Victor Mitrow”

Justice Victor Mitrow

Date: September 23, 2014